TAX BURDEN AND INCOME DISPARITIES A REVIEW OF PAKISTAN…

ISSRA Papers Volume-X, Issue-II, 2018

TAX BURDEN AND INCOME DISPARITIES – A REVIEW OF PAKISTAN’S TAXATION SYSTEM

Adnan Zulfiqar Mirza, Hassan Jalil Shah & Tahir Mahmood*

Abstract This article explores the effects of taxation system of Pakistan, especially indirect taxes, on the distribution of wealth between the rich and poor. The purpose is to determine the tax burden and the resultant income disparities focusing on the poor segment of the society. Pakistan’s taxation system emerged from the ashes of British colonial rule and so it absorbed exploitative and iniquitous tendencies. With a large population living below the taxable threshold, reliance of the government to use indirect taxation as a mean to raise the tax to GDP ratio reduces the welfare dividend and compounds income inequality. This produces a cyclic process of economic inefficiencies and distortions which inadvertently widens the socio-economic gap. This article also proposes a Tax Revenue Strategy to policy planners to mitigate the effects of negative economic distortions arising out of weak taxation structure to reduce income inequalities.

Key Words: Direct and Indirect Taxes, Vertical and Horizontal Equity,

Progressive, Regressive, Distortions

Introduction

he question of how to widen the tax net has baffled every government as it

always faced difficulty in choosing the appropriate instrument(s) or the

right tax mix to raise revenue. No government can perform its functions

and meet the domestic social, economic and defence needs without a sound

revenue base and the only way to generate sound revenue is through an

effective tax system. In Pakistan, the challenge is exacerbated as people avoid

paying taxes, lack trust in government’s handling of its finances and above all

the bulk of the population resides below the minimum taxable threshold and

hence cannot be optimally taxed. Moreover, the poor class in our society lives in

the “informal sector” where tax collection is difficult, costly and the return is

low due to abject poverty.1 In this situation, the essential question remains as to

what can be the optimal tax mix for revenue generation that doesn’t overtax the

poor or leave the rich under taxed. Gross income inequality amongst the

masses, ineffective service delivery and excessive government expenditures

prohibit cultivation of a conducive tax climate which responds to the needs of

the government and the society.

* Mr Adnan Zulfiqar Mirza is a graduate of National Security and War Course and Dr Hassan

Jalil Shah is registrar of National Defence University, Islamabad and Dr Tahir Mahmood is currently serving as Assistant Professor at School of Economics Quaid –i- Azam University, Islamabad.

T

100 ADNAN ZULFIQAR MIRZA, HASSAN JALIL SHAH & TAHIR MAHMOOD


Many consider that increase in rates of taxes will enhance the tax to GDP

ratio. Although a convenient option, there are long term ramifications of such

an undertaking as any increase directly impacts the economic activity and the

consumption behavior of the people thereby affecting revenue generation the

policy aims to increase. Also, the size of “shadow” economy in our country is

increasing and the true potential and magnitude of this economic reality is little

known. When imposed, taxes do not discriminate between the rich and poor

but they do enhance the relative income disparities by causing reduction in the

amount of capital in the hands of the consumer. Whenever there is greater

reliance on indirect taxes, the tax burden on the poor class will be more than

the affluent class which leads to uneven distribution of wealth. Aforesaid in

view, there is a need to study the effects of current system of taxation on the

common man and how these can be mitigated through a more equitable tax

system.

There has been no worthwhile research on the issue of vertical and

horizontal equity with regard to Pakistan’s system of taxation that analyzes the

tax burden on the common man. This research is an effort to study the effects of

taxation, both direct and indirect, on the distribution of wealth and the income

disparities arising thereof focusing on the poor segment of the society. It is

hoped that the proposed strategy at the end may provide some insight and food

for thought for policy planners to make the system of taxation more responsive

to the needs of the poverty stricken.

Methods and Sources

This exploratory research is based on interpretivist approach / qualitative

framework to gain deeper understanding of the problem through the lens of

individual and group experiences. The qualitative research was based on a series

of in-depth and semi-structured interviews with the subjects specialists,

followed by visits to FBR, Finance Division and provincial tax collecting

authorities. Interviews with government officials and taxpayers from all social

segments helped in understanding the problem from different standpoints. This

use of ‘Phenomenology’ permitted empathetic and objective valuation of their

experiences in order to make objective assessments.

The research also incorporates study of latest and updated reports as well as

available literature on the subject of taxation in Pakistan. The data has been put

together utilizing both primary and secondary sources including use of survey

questionnaire, printed literature and wherever required web resources to fill the

gaps with latest data / information. Reports such as the Economic Survey of

Pakistan from 2005-2018, Financial reports of the State Bank of Pakistan, IMF

Reports on the taxation measures in developing countries, World Bank and FBR

resources including their biannual reviews encompassing reports from the last

TAX BURDEN AND INCOME DISPARITIES 101


15-20 years were consulted. Video lectures and talks by experts organized in the

National Defence University also provided immense and valuable information

to embellish this work besides providing new vistas for further exploration.

Structure of Taxation in Pakistan

The problem of taxation in Pakistan has been chronic, being one of the

main reasons propelling consistent fiscal deficits over the past. Lower tax

morale, tax evasion and high compliance costs have been few major challenges

that have constrained FBRs capacity to generate sufficient revenue for the

Government.2 With limited financial levers available, the Government is unable

to spend on social sector development which further erodes the confidence of

the taxpayer in the Government’s ability to provide public goods. A critical

analysis of the existing taxation strategy and shortfalls in the implementation

methodology is imperative to understand the complex matrix of Pakistan’s tax

structure and how it affects the socio-economic condition of the peoples down

the social ladder. Before any in-depth analysis, a brief understanding of the

nature and types of taxes is essential to comprehend the issues.

Pakistan follows a mix of direct and indirect methods of taxation to raise

revenue with the lion’s share tilted profoundly towards “indirect taxes” (Figure

1). As evident from the name, indirect taxes are regressive3 in nature as they

usually target consumption. On the other hand, direct taxes are levied on

salaries, profits, dividends according to their scale as a share of percentage.

Hence, these are progressive and more equitable than indirect taxes.

Figure 1: Proportion of Direct & Indirect Taxes in Overall Revenue 2017-18

Direct Taxes 40%

Indirect Taxes 60%



With such a huge share of indirect taxes in the overall “Tax Mix”, the

resultant regression in the tax mechanism is natural which fosters income

inequalities rather than reducing them. Countries with high tax to GDP ratios

adopt a policy of progressive taxation which caters well to address the income

inequalities in the society. Contrarily in Pakistan, the incidence of indirect

taxation directly impacts the entire social structure oppressing the poor and the

affluent alike without discrimination.

Federal and Provincial Tax Collection

According to the Constitution of Pakistan, the power to tax is delineated

between the Federal and the provincial governments. The provinces are to

administer taxes on more challenging tax bases such as agriculture, services,

property etc. Provinces contribute barely 4 -7 % of the total revenues. On the

contrary, they receive 35 % from the Government to meet their own

expenditures. This gap is clear manifestation of poor collection on the part of

provincial governments. This burden of the Federation often is the main reason

for increasing reliance on indirect taxes. Provincial taxes include property tax,

excise duties, stamp duties, motor tax etc.

Direct Taxes

Direct taxes contribute 40% of total revenue collected by the government.

Income tax alone contributes 28% within which only 4% is collected from

personal income taxes.4 This poor collection leaves the government with little

choice but to levy more number of indirect taxes to address the shortfall.

Indirect Taxes

Developing countries are often challenged by larger segments of poor

population and only a small percentage of the elite or the affable class. Hence,

in such situations indirect taxation emerges as the predominant tool for revenue

generation owing to a very narrow tax base, very high compliance costs and an

unusually large informal sector that is quite difficult to document as well as

luring in into the tax net. In addition, accomplishing a better redistribution of

the tax burden as well as enhancing progressivity become an onerous task. It is

unfortunate that “indirect tax” has become an indispensable tool in the hands of

the government to enhance revenue. In Figure 2, the trend of steady rise in the

scale and magnitude of indirect taxation is clearly visible. Mostly, in our context

indirect taxes include the Sales Tax on consumption, the Federal Excise Duty

(FED), Custom Duty, Petroleum levy etc.



Figure 2: Trend of Increase in Regressive Taxation

Source: The Global Economy.com, the KPMG

Federal taxes were 92% of the total collections in 2015/16. In the year 2016/17

the revenue collection improved by 8.2% compared to the preceding year. In the

year 2017/18 the revenue collection increased by another 14.1%.5 Sales Tax, a

major indirect tax, has the largest share in the total which is 36% and is the lion

share holder. Income tax is next at 33%. Custom duties and excise duties are at

11% and 5 % respectively. Provincial taxes are about 7% of the total revenue.

Compared with India, the provincial share is very low as Indian states

contribute almost 35% of their total revenue which is quite high. On the

average, almost 60% of the total revenue collected by the government is

received from indirect taxes which is quite a high percentage. Due to the huge

share, it is evident that a very large segment of the population belonging to the

poor class is significantly affected by the same.

Distortions in the System of Taxation

Limited information is available on vertical and horizontal equity of our tax

system in the existing knowledge base. Also, various economic sectors have

been treated differently and often out of sync with their inherent potential

which makes the system of taxation distortionary and opening ways for income

disparities. When we take into account the share of major economic sectors in

the GDP, as shown in Figure 3, we observe that Services Sector has always held

the lion’s share in the overall GDP since 1999-2018 which amounts to more than

50% approximately, however, it only contributes around 30-35% in taxes.



Likewise, agriculture holds a share of 20% in our GDP but its contribution in

taxes is barely 1%.6

Figure 3: Share of Major Economic Sectors in GDP (1999–2018)

This imbalance diverts heavy investments towards least taxed sectors and

withdrawal or reduction of economic activity in heavily taxed sectors. Thus, a

developing country which is not managing the allocation of its economic

resources well is compromising on the magnitude of revenue collection as well

as retarding the pace of growth. The arising mismatch of resources increases

the tax burden in certain areas and also increases the burden of honest tax

payers as the government will be forced to levy new taxes to make up for the

shortfall induced by an underperforming sector. This act of the government will

further affect the economic efficiency and thus produce an undesirable cycle of

poor economic performance in addition to compounding horizontal and vertical

iniquities.

Underground (Shadow) Economy

This is a major drain on the state as it functions out of the tax net and is

neither “observable” nor “auditable”. At present, the size of our undocumented

economy is estimated to be 70-80% of the GDP7 which means $100 billion

dollars or 13900 billion rupees.8 This is quite huge and a serious drag on the

states’ revenue collection. The question of revenue collection is not as serious as

the revenue lost due to lack of documentation. Shadow economy occurs when

the economic activity circumvents the existing regulatory channels of the

government. It is mainly caused by illiteracy, cash transactions, non-banking

transactions, lack of invoice culture, flourishing small scale traders, smuggling

0

20

40

60

80

Agricultural Sector Industrial Sector Services Sectors

Sector/Industry 1999-2000 2000-01 2001-02

2002-03 2003-04 2004-05 2005-06

2006-07 2007-08 2008-09 2009-10

2010-11 2011-12 2012-13 2013-14

2014-15 2015-16 2016-17 2017-18



etc. Complex rules and regulations of taxation, high tax rates, and lack of

confidence on the part of taxpayers on the tax system further complicate it.

Also, a narrow tax base results in a higher tax rate which in turn compels more

people to the folds of undocumented economy. Size of the informal economy in

Pakistan in 2008 ranged between a massive 74 to 91 percent of the formal

economy.9 As per the Labour Force Survey of Pakistan (2010-11), almost 74 per

cent of the non-agricultural labour force is earning livelihoods through the

informal sector, and of the total employed labour force, 40.6 per cent or 21.8

million relied directly on the informal economy for their sustenance.10 A large

informal sector compels the government to seek foreign aid, easy loans and

grants hence pushing the country towards a vicious debt cycle which impacts

the national economy.

Tax Incidence and Distributional Effect

Our society is largely composed of poor class / lower middle income class

whereas the wealth is saturated within a narrow group of elite class at the top;

the middle class being a modest chunk of the population. It has been a real

challenge for every government to collect taxes from the elite class and

redistribute the effect to the lower echelons of the society. According to a recent

report by Oxfam titled “Commitment to Reducing Inequality (CRI) 2018”

Pakistan has been ranked at 137th position out of 152 countries which is quite

low. In terms of progressive taxation, it has been ranked at 98.11 The report also

highlights that many of the low earners in the society are women who are often

paid lesser than men and are mostly working in a non-secure work

environment. In such circumstances, it becomes extremely challenging to

mitigate the effects of income disparities. Besides, the income disparities are

further aggravated as the elite and affluent attempt to pass the burden of tax

onto the lower classes. Thus, it becomes difficult to correctly assess where the

tax incidence exactly lies.

In order to understand tax incidence we can make use of two important

terms namely, Statutory incidence and Economic incidence. The former implies

as to who is bound legally to pay the tax and the latter means the exact

distribution of the effect of tax on either the buyer or seller. In our

environment, due to a plethora of indirect taxes, the burden usually shifts to the

consumer and this makes the plight of common men even more difficult. The

relative growth in the indirect means of taxation has not been in sync with

direct taxes and the magnitude of relative growth between the two is not steady

as evident from Figure 4, when we take into account growth over a period of

decade, 2008 to 2018.



Figure 4: Comparison of Direct and Indirect Taxes (2008-2018)

Source: State Bank of Pakistan

In order to elucidate the burden of a particular tax on common man a

simple example will be helpful. Let us assume two different items such as milk

and biscuits for the purpose. Each item has a unique value in terms of its utility

for the producer and seller. Milk is an essential commodity and used invariably

everyday in each household for making tea, cereals, feeding, desserts etc.

Accordingly the demand for milk will always be “Inelastic” i.e. even if its price

goes up it will be difficult for people to stop consuming milk. People will

continue to buy milk albeit in a lesser quantity. On the other hand, biscuits are

not as vital in everyday life as milk. Thus, the demand for biscuits will always be

“Elastic” which implies that if the price of biscuits goes up the buyer may not be

very keen to buy them and shift to cheaper substitutes. Plotting this on a graph

in Figure 5, we can deduce that the burden of tax when the demand is inelastic

is on the buyer compared to the seller/ producer. Initially, the equilibrium price

of milk was $10. When a new tax is imposed (indicated by red arrow on the left)

the equilibrium is disturbed and the price goes up and the same milk is

available for sale at $14. This entails that the consumer is compelled to pay

additional $4 to get the same amount of milk which may force him to decrease

his milk consumption. The seller/ supplier also receives $8 instead of the old

equilibrium price of $10 as the new price wedge, created by imposition of new

tax, causes a reduction in the demand for milk leading to price readjustments at

$14 and $8 for the consumer and supplier respectively along the S2 supply curve

(Figure 5). Thus, the supplier receives $2 lesser than his usual profit. This

indicates that a tax on consumption or any indirect tax creates a burden on the

poor, reduces the profit of the seller and this results into an economic

inefficiency in the milk market. As the demand for milk is inelastic, the market

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

Direct Taxes Indirect Taxes



continues to function but its vibrancy is relatively reduced due to drop in

demand triggered by the new tax.

Figure 5: Tax Incidence Inelastic Demand

In the 2nd example (Figure 6), we analyze the market of biscuits, the

demand for which is ‘elastic’. In this case, the new tax reduces the demand by a

significant margin (from 80 to 50 as shown along x axis). As the consumers can

survive without biscuits, therefore, stop buying biscuits and move to other

substitutes. The tax burden is greater on the seller. This forces the supplier to

produce less which may lead to closing of business, job layoffs etc. This results

into other economic inefficiencies in the system.

Figure 6: Tax Incidence – Elastic Demand



Such analysis is vital in order to frame correct taxation policies to ensure

tax incidence does not spread unevenly which may enhance income disparities.

The government needs to be cognizant of the fact that the burden of tax will

always be borne by the people because businesses, even if they apparently bear

the burden of taxes, still make all out efforts to pass on the liability to the

buyers.

Taxation affects the economy in many ways. Imposing a new tax raises the

price of a commodity for the buyer, reduces return for the seller and slows down

the market of that commodity which is called the Deadweight Loss (DWL).

When the government increases an existent tax or imposes a new and larger

one the magnitude of the DWL will be equally large. For example, if the

government doubles an existent tax then the net effect on DWL will be more

than double. Refer to Figure 7. When a country has high tax rates then the

implication of raising these further may be detrimental to the economy.

However, lowering them will benefit the government. On the other hand, if tax

rates are already low then raising them will not have much harmful effect,

however, further reducing them will also not be of much benefit. An increase in

the size of a tax causes an increase in government revenue in the early stages,

however, eventually the revenue declines as the tax causes the market to shrink.

Figure 7: Deadweight Loss (Economic Inefficiency due to Tax Variations)

Research Findings

Overall, the study has concluded that share of indirect taxes within the

federal and provincial tax codes is quite large and difficult to be dispensed with

at the outset, especially when the government is faced with a huge debt and



balance of payments crisis. However in the long run, for better economic

efficiency, it is vital that as the tax base is widened then correspondingly the

share of indirect taxes be gradually reduced. This will not significantly affect net

revenue collection as the reduction effect will be nullified by the expansion

effect achieved at the tax base. Reduced burden of taxes will propel economic

activity by leaving a larger share of after –tax income in the hands of the

consumers which is vital for boosting aggregate demand and attaining increased

growth. Thus, the hypothesis of the study stands proven that reduction in

percentage of regressive taxes will not reduce the future net revenue collection;

rather it will be conducive to socio—economic well - being of the masses at the

lower level who in turn will expand the tax base, and hence the net revenue,

when they move upwards in the socio-economic ladder.

A few more specific findings of the study include:

a. Pakistan’s taxation system, inherited from the British days, had been

slow to transform and internalize according to our native cultural and

socio-economic needs.

b. The poorer ones pay more “in proportion” than the affluent class in

terms of indirect taxes despite the fact that the richer pay more ‘in

magnitude” for the same type of taxes.

c. Increased distortions in the tax system create economic inefficiencies

and poor service delivery giving rise to inequality and social tensions

creating an imbalance in the society.

d. Higher rates of indirect taxes increase DWL which reduces purchasing

power of common people and enhances income disparities.

e. The benefit provided to the taxpayer in the form of services may be

neutralized or minimized by the accruing DWL in terms of market

inefficiency induced.

Recommendations

Since a new government has assumed the charge at the Centre, the urgency

to implement and sustain a reform agenda in the tax code is the only solution

for better fiscal management. Only an adaptive and responsive tax system can

meet the needs of the globalizing economic environment. In the ensuing paras,

a possible strategy to enhance revenue has been proposed, which provides a

road map to making the tax system more equitable, mitigate effects of income

disparities and achieve better redistribution of wealth:

The taxation system should be made more progressive and internalized

to our socio-economic needs by reducing the percentage of indirect

taxes to reduce burden on poor. High concentration of indirect taxes

leads to evasion and non-compliance. Equity in tax system should be



achieved through the “Ability to Pay Principle’. This implies rich and

poor pay according to the proportion of their incomes and profits.

Progressivity will be achieved when deterrence is effective against

evaders, especially the rich and elite to bring them into the tax net.

Effective intelligence, monitoring and surprise audits are needed to

ascertain wealth and prohibit evasion. FBR must deal with the services

sector with an iron hand as it remains under taxed due to on spot

bribery, underwriting tax obligations and profits whereas most of them

charge hefty amounts from the poor class for the services rendered.

Increased progressivity will reduce share of regressive taxes.

Lowering of tax rates is yet another form of curbing evasion and easing

out the poor class. This should be done in local industry market to

ensure that small markets don’t lose vibrancy. Initially, the government

may lower tax rates by small fractions to incentivize the consumers and

sellers followed by higher reductions, tax concessions etc. This will also

help in taxing a larger segment of people through low rates and help

achieve better, or at the minimum, the same level of revenue being

collected when the rates were higher through a broadened base.

The government should minimize DWL (deadweight loss) arising out

of taxation in every commodity market where the demand is inelastic.

This will help generate a more efficient economic activity as well as

reduce the burden on the consumer. This implies designing a tax

instrument according to market efficiency of each commodity i.e. the

government may impose tax on a wide range of goods and services but

it may have different rates for each.

In order to achieve equitable effects in taxation in the rural domain, the

government may consider bringing landlords with large landholdings

into the tax net. As agriculture remains a soft sector from taxation

point of view, there is a need to gradually reform this area. Presumptive

taxation (tax in advance) can be initiated as a test case for levying tax

on agriculture. One way to do so is to estimate the size of the land, the

productivity of the land and an assessment of the input costs specific to

that area. Once the crop has been harvested, the final liability can be

adjusted to collect revenue. Such measures will reduce the need for

huge subsidies in the agriculture sector and allow the government to

utilize collected revenue on reducing income gaps in the rural sector

through provision of allied services and facilities such as healthcare,

education etc.

Government’s tax policy must be able to sustain and endure internal

pressures from vested groups and pressure tactics especially in policy

formulation and implementation. The introduction of numerous

concessions, tax exemptions providing relief to the affluent create



distortions in the tax system. Such practices taint government

legislation on tax matters impairing Government’s ability to enforce

and implement an equitable tax strategy.

After the mainstreaming of FATA, the Government at the federal and

provincial levels need to devise smart taxation instruments specific to

the tribal environment which do not inhibit growth and economic

activities and aim to forestall income disparities right from the outset

besides creating jobs for the poor and neglected. While the government

writ has extended to all areas under its sovereign control, the tax

treatment of FATA cannot be meted at par with other areas of the

country to avoid any disillusionment amongst the inhabitants. Instead

their confidence must be restored through increased spending in the

early years by the government to boost confidence amongst the masses.

This will help in achieving smoother transition of an impoverished area

into a relatively developed area like others.

The government must expend the revenue in areas of maximum impact

such as public infrastructure, health and education which will help

motivate the people and cultivate a positive atmosphere for an

enduring tax climate in the country. Increase in tax revenue, when

sustained over a long period of time, can increase fiscal space of the

government. Enhanced fiscal leverage with the government can also be

used to invest in the economy which can propel economic growth

thereby creating a cyclic process of increasing revenue over a period of

time. The additional benefit can then fund more poverty stricken

people to elevate their status above poverty level.

Conclusion

The inferences drawn from this research ratify the fact that distributional

effect of taxation in our environment has not been optimal due to larger share

of regressive taxation. The existence of an ever growing informal sector and the

pace with which it is expanding must ring alarm bells before it is too late. If this

informal sector is documented, beginning from the larger and more productive

units in the economy, their contribution, albeit slowly but assuredly, is likely to

increase the revenue.

The main objective of the government in Pakistan should be to recalibrate

the existing tax system in a manner that tax reduces economic burden on the

common man and also maximizes the component of social welfare. The

conclusions thus support the notion that decrease in tax rates are likely to

increase the revenue collection rather than the contrary, as widely believed. We

can presume that lowering the tax rates has a positive relationship with

economic behavior of subjects within the state. Also, greater reliance on indirect

taxation will disrupt the vertical equity of the tax system. It is vital, therefore,



that the government should endeavor to evenly distribute the burden of taxes

rather than merely rely on indirect taxes as the sole mean of revenue generation.

Adam Smith reiterated this notion as under,

“The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities.”

― Adam Smith, The Wealth of Nations

Endnotes

1 Chaudhry, Imran Sharif, and Farzana Munir. “Determinants of Low Tax Revenue

in Pakistan.” Pakistan Journal of Social Sciences, 2010, 439–452. 2 Cyan, Musharraf R., Antonios M. Koumpias, and Jorge Martinez-Vazquez. “The

Determinants of Tax Morale in Pakistan.” Journal of Asian Economics 47 (December 1, 2016): 23–34. https://doi.org/10.1016/j.asieco.2016.09.002.

3 “The Poverty Implications of Alternative Tax Reforms: Results from a Numerical

Application to Pakistan.” Policy Research Working Papers. Accessed May 19, 2019. https://elibrary.worldbank.org/doi/pdf/10.1596/1813-9450-8164.

4 Musharraf R. Cyan and Jorge Martinez- Vazquez, Pakistan’s Enduring Agenda

for Tax Reforms, In Jorge Martinez-Vazquez and Musharraf Rasool Cyan, The Role of Taxation in Pakistan's Revival (Oxford: Oxford University Press,2015).

5 Government of Pakistan, Federal Board of Revenue Year Book 2017-18

(Islamabad: Federal Board of Revenue, 2018). 6 Pakistan GDP Distribution across Economic Sectors 2017 Statistic.” Accessed

January 6, 2019. https://www.statista.com/statistics/383256/pakistan-gdp-distribution-across-economic-sectors/.

7 Jorge Martinez-Vazquez and Musharraf Rasool Cyan, The Role of Taxation in

Pakistan's Revival (Oxford: Oxford University Press, 2015). 8 J.Martinez Vázquez, & M. R. Cyan, Pakistan’s Enduring Agenda for Tax Reforms,

Page 18. In J. Martinez Vázquez, & M. R. Cyan, The Role of Taxation in Pakistan's Revival. Oxford: Oxford University Press.

9 Qazi, Ghulam Mustafa. n.d. “Business Climate in Pakistan-Challenges and

Remedies,” 113. 10

Tahir, Nadia. “Informal Employment in Pakistan: Survivalist or Structuralist?,” n.d., 13.

11 Lawson, Max, and Matthew Martin. “The Commitment to Reducing Inequality

Index 2018: A Global Ranking of Governments Based on What They Are Doing to Tackle the Gap between Rich and Poor.” Development Finance International; Oxfam, October 9, 2018. https://doi.org/10.21201/2018.3415.

https://www.goodreads.com/work/quotes/1373762

https://doi.org/10.1016/j.asieco.2016.09.002

https://www.statista.com/statistics/383256/pakistan-gdp-distribution-

https://www.statista.com/statistics/383256/pakistan-gdp-distribution-

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TAX BURDEN AND INCOME DISPARITIES A REVIEW OF PAKISTAN…